What are the potential consequences of insufficient risk management?

Insufficient risk management can lead to increased accidents and legal liabilities because a lack of proper risk assessment and mitigation strategies leaves organizations vulnerable to hazards. Without comprehensive risk management practices in place, potential dangers may go unaddressed, resulting in workplace incidents, injuries, or accidents. This not only endangers employees but can also lead to significant financial repercussions, including medical costs, compensation claims, and legal expenses associated with liability cases.

In contrast, options related to training costs, employee morale, and operational efficiency do not directly result from inadequate risk management. While increased training costs may occur as a response to poor risk outcomes, they are not a direct consequence of insufficient management of those risks. Similarly, insufficient risk management is unlikely to lead to improved employee morale or greater operational efficiency; rather, the reverse is typically true—companies with strong risk management practices often experience better outcomes in these areas, while poor practices can create a negative work environment and hinder organizational performance.